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Two hundred years ago the American people were quite a bit more equal in terms of wealth, and life was marked by unrelenting drudgery. Those relatively brutal living conditions weren’t an effect of socialism, even though socialism would have eventuated the same outcome.

The shame of socialism is that the wildly talented are restrained from profitably improving the lives of the people around them, and perhaps continents away. Thinking about life two hundred years ago, distance was a severely limiting factor for the talented when it came to think making things better for everyone. No doubt there were people with skills similar to those of the richest Americans today, and some became very well-to-do by early 19th century standards. But they didn’t become staggeringly rich simply because a lack of technology limited the ability of the ‘1 percenters’ of the early 19th to touch the U.S. (and the world) with their genius. Limited technology has socialistic qualities in the outcome sense for it restraining the brilliant from improving the lives of others while getting rich for doing just that.

But as is well known now, inequality of the wealth variety began to soar toward the end of the 19th century, and even more in the early part of the 20th. It used to be that when night fell, the day ended. With most lacking the means to burn candles that didn’t much illuminate as is, there was little to do or see at night. John D. Rockefeller’s first fortune remedied this living-standard cruelty. The kerosene that he sold widely quite literally lit up the night for the common man.

Thanks to railroads and other advances that were bringing on the “death of distance,” someone of Rockefeller’s entrepreneurial caliber could suddenly reach more than just the locals with his skills. That was one source of his early wealth. And then he shifted his focus to the refining of oil. Rockefeller’s mass marketing of gasoline eventually gave life to the automobile that Henry Ford grew immensely rich mass producing. Whether it was ships, railroads, cars, trucks, or airplanes, technological advances were all about bringing on the “death of distance.” Before technology shrank the U.S. and the world in a figurative sense, entrepreneurial genius was logically a narrow, town and/or neighborhood concept. After its proliferation, the surging inequality that resulted was the very predictable, and very happy result. The “robber barons” got rich by virtue of erasing cruel living standards simply because the talented could more and more serve the masses. Readers should never forget that the richest entrepreneurs almost always get that way by improving the living conditions of the greatest number of people. Surging wealth inequality is rather egalitarian and immensely compassionate despite what you’re told.

Which brings us to a recent USA Today article about Pizza Hut, and how it may “be taking its pie-making show on the road.” Yes indeed. As the self-driving car future becomes increasingly clear, it’s no surprise that businesses are feverishly working to figure out ways to profit from cars that no longer need drivers. Those profits are a sign that living standards are set to take yet another life-enhancing leap in the not-too-distant future.

In Pizza Hut’s case, USA Today’s Mike Snider reports that the chain is planning a “pizza-making robot prototype that cooks pizzas on the way to customers’ homes…” As Pizza Hut COO Nicolas Burquier told Snider, “We are always looking to find ways to bring the oven even closer to the doors of our consumers.” Death of distance indeed. If driving and pizza-making can be automated, then so can the size of the market that Pizza Hut chains serve expand. Even in big cities we’re already aware of how restaurants can frequently only serve a limited area, but if cars with ovens are driverless, getting pizza will no longer be a problem. Even in rural areas. Pizza Hut’s growing revenues will signal how much more useful the chain is to a growing number of people.

The profits will also be a sign of how much better-tasting are the pizzas that reach the chain’s customers. As Burquier went on to tell Snider, “Our obsession is always the same: How do we reduce the gap between the moment when the pizza comes out of the oven and when the customer starts to enjoy eating our product?” Technology is increasingly solving what was once a distance and time problem, along with one associated with not always reliable drivers. Translated, driverless cars and automated pizza-makers can’t call in sick, can’t give customers attitude, don’t require sleep, plus they realistically can’t quit. The days of 24-hour pizza delivery aren’t too far off….

Walmart understands what Pizza Hut does: its profits will grow the more that it makes life easier for existing and potential customers. And so it’s focused on innovating. USA Today’s Charisse Jones writes that this holiday season, Walmart shoppers will be able to use “a digital map to find the toy or TV they’re looking for, then make the purchase right in the aisle where they find it.” These two shopping enhancements will come care of an app that will enable shoppers to “pinpoint the location of whatever item they’re needing to tick off their holiday list,” and then employees stationed throughout the retailer’s stores will be nearby to complete their purchases sans checkout lines. As Steve Bratspies, Walmart’s chief merchandising officer explained it, they always want buying to be “fast and convenient.” Of course.

And as Amazon’s Go stores remind us, entrepreneurs are just scratching the surface when it comes to expanding the ways in which they can serve us. Amazon wants customers to have a checkout-free experience in its physical stores, one or two day access to everything on sale with one-click, and if drones (or some other technological marvel) fulfill their promise, customers will eventually have near instantaneous access to the world’s plenty through a click of a mouse.

Crucial about all this is that the commercial seers who get the future right will grow stunningly rich for being right. The more convenient life is, the more unequal are the living. But as opposed to a sign of hardship, the happier truth is that life is truly cruel when the talented aren’t getting rich. That’s when we know that no one is devising ways to make our lives easier, cheaper, healthier, more productive, and everything else good. Life without rising inequality is very much like life with socialism.

Though readers can’t exactly raise their hands, this column asks readers to at least internally raise them if they’ve purchased something on Amazon in the past month. The column would also like to know how many readers have used the internet in the past hour, but the question is redundant: If you’re reading this column, you’re using the internet. In that case, how long could you go without internet access before losing your mind in the figurative sense?

Probably not very long. Evidence supporting the previous claim is all around us. When people aren’t at their desks working on internet-connected computers, they’re almost invariably tapping away on internet-connected smartphones. Look around you. It’s not too much of an exaggeration to say “everyone” is on the internet nearly all of the time.

That so many of us view the internet as essential to our existence is a certain sign that most of us have no major problem with rising wealth inequality. Think about it. It’s easy to see the connection between frenetic internet usage and soaring inequality. And for the readers certain that they in no way cheer a rising wealth gap, they might ask themselves if they hate inequality enough to forever renounce their laptop, smartphone, high-speed WiFi, the future promise of 5G, and any other technology that connects people. Absent the world going cold turkey on ever-improving technology, wealth inequality is going to grow and grow. Wonderful. Life will get better as the super-talented are able to reach more and more of the world with their genius. The internet is most certainly the biggest driver of rising wealth inequality in the world, and nothing else comes close.

Punishing Innovation

This brings us to the column by Farhad Manjoo, technology writer for the New York Times. In it, Manjoo writes that “Jeff Bezos should spend his vast fortune pushing for a society where no one can ever become as rich as Jeff Bezos is now.” It’s hard to know whether to laugh or cry or how to analyze what is so obtuse and contradictory. Bezos got rich by virtue of relentlessly meeting the needs of his global customer base, and because he did, Manjoo wants Bezos to spend his fortune making sure no future individual achieves on the scale that Bezos has? Oh, dear…

Implicit in Manjoo’s confusion is that he would have preferred that Bezos had quit tinkering with books, CDs and DVDs. If not the latter, what is Manjoo’s problem with Bezos being so rich? Bezos’s wealth is largely an effect of Amazon’s shares; investors have placed a high value on them given their belief that Bezos will continue to figure out ways to please a growing customer base, yet Manjoo writes as though what Bezos did was a bad thing. By this measure, the late Steve Jobs should have stopped at the iPod, and Mark Zuckerberg should have limited Facebook just to kids at elite American colleges. Reducing all of this to the absurd, would Manjoo blanch at a mass-produced cancer cure if he knew the creator would earn billions for creating it? What about a cure for paralysis?

All of the above is a long way of musing about what Manjoo could possibly mean by his droolings. It’s evident he thinks Bezos has succeeded too much, but then Bezos, Jobs, and Zuckerberg were and are worth billions precisely because few of us could go too long without utilizing their creations. As opposed to limiting the number of people like Bezos, it seems the world would be much better off if there were hundreds like him. Only richer.

Bezos Revolutionized the Internet—and the World

What about the internet more broadly? Manjoo claims that “Mr. Bezos’s extreme wealth” is a function of the “unequal impact of digital technology,” but what he leaves out is that Bezos wasn’t always worth billions. In fact, there was a time when Bezos was ridiculed for presuming the internet had any kind of potential as a connector of buyers and sellers. If Manjoo doubts this, he need only visit the majority of venture capitalists and investors who either passed on backing Amazon in its early days or who consistently passed on buying the shares of what used to be described as “Amazon.org.” Manjoo also misses that the “unequal impact of digital technology” wasn’t handed to Bezos as much as he created it. He saw the commercial potential of the internet long before others did.

Thinking about all this, short of Bezos somehow using his wealth to shut down the internet altogether, there’s quite simply no way he could push for “a society where no one can ever become as rich as Jeff Bezos is now.” Having pioneered what is brilliant, more and more brilliant minds like Bezos will meet the needs of more and more of the world’s population via the usage of the internet that Bezos revolutionized. While 100 years ago an immensely talented entrepreneur like Bezos could arguably only improve the lives of people in Seattle with his genius, the global interconnectivity the internet personifies means Bezos can increasingly serve the needs of the world from Seattle.

Better yet, this interconnectivity is only going to become more pronounced. If 5G lives up to its billing, the ability of the talented to meet our myriad needs is only going to grow, and with it, so will inequality. Sorry, but the internet you can’t live without is the driver of wealth inequality that is set to soar. Thank goodness. Rising inequality in terms of wealth is a sign of shrinking lifestyle inequality between the rich and poor. Think about it. Entrepreneurs generally amass great wealth by virtue of mass-producing the goods and services previously only enjoyed by the rich.

Manjoo ultimately wants Bezos to direct his wealth toward creating a more “equal” society whereby the “have-nots” have access to what the “haves” do, but in clamoring for this false utopia, he’s unwittingly calling for exactly the rising wealth inequality he bemoans. Indeed, Manjoo ignores that money on its own has no uses. Money is only useful insofar as it can be exchanged for goods and services. Applied to Bezos, the redistribution of his dollars to the alleged “have-nots” will only improve the lives of the downtrodden insofar as they can exchange them for life’s comforts. Crucial here is that Bezos got rich providing those comforts. Manjoo oddly wants to make sure no one ever eclipses Bezos, but Bezos giving away his billions to the poor will mean nothing to the poor if there aren’t people like Bezos constantly figuring out ways to meet the needs of the people. All this is an inconvenient truth for statists like Manjoo—and card-carrying socialists, too: They only have a voice and a purpose if the capitalist economy is thriving whereby they can obnoxiously call for the forceful seizure of the wealth produced by the capitalists. The capitalists don’t need socialists, but my oh my, how the socialists need capitalists.

The endlessly confused Manjoo is unsurprisingly caught in a total contradiction. He wants the poor to enjoy the trappings of the unequal, and he wants people like Bezos to finance this equalization but doesn’t want anyone ever again getting as rich as Bezos. But again, redistributed wealth has no meaning if the profit-motivated aren’t bringing goods and services to the market at the same time. Basically, Manjoo naively wants Bezos without all the wealth creation, which is an impossibility. Even if Bezos drops all of his billions into the poorest parts of the world from helicopters, those dollars will only be useful to the poor to the extent that a future Bezos is getting filthy rich serving them…Think about it. Farhad Manjoo obviously hasn’t.

John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).

We’ve highlighted Professor Deirdre McCloskey’s concept of trade-tested betterment – the innovation and economic growth resulting from capitalism that has boosted standards of living in developed countries by 3000% in 200 years. Stephen Miller, writing in the Wall Street Journal, tells us a personal tale about betterment over the years to which we can all relate: how cars went from dodgy to dependable, improving consumers’ quality of life in a very direct way.

——————————————————————————————————————————————-

I take for granted these days that my four-year-old car will get me from A to B without breaking down. Forty years ago, this wasn’t the case. When I drove, I would listen carefully to the car’s many sounds, worried that something was about to go wrong.

This anxiety was reasonable. My first car, purchased in the early 1960s, had an unusual problem: The accelerator pedal sometimes stuck to the floor. I would have to bend down to get it unstuck while keeping one eye on the road. A few years later I bought a new car, but before long its fuel pump began to clog, and the engine would suddenly die. My next car had a very exposed gas tank that, in the event of a rear-end collision, could cause a fiery explosion. The car after that had a bad distributor that caused the engine to sputter in rainy weather. I would have to stop every 50 miles and wipe the distributor dry.

The cars of the 1950s through the 1970s were prone to problems. They had a tendency to overheat when stuck in traffic on hot summer days, and their tires would often go flat. I once got a flat at 1 a.m. on the approach ramp to the Verrazano Bridge between Staten Island and Brooklyn. Fortunately, a police car showed up and I changed the tire without getting killed.

Today, cars are much more reliable. I can’t remember the last time I called roadside assistance. “Getting 100,000 miles out of a car in the 1970s was cause for celebration,” economist Steven Horwitz wrote in a 2015 paper. “Not getting 100,000 miles out of a car today is cause to think you bought a lemon.”

The improvement came because of what Deirdre McCloskey, author of “Bourgeois Equality,” calls “trade-tested betterment.” In countries with strong market economies, companies that develop better products and services usually reap financial rewards—as long as the government doesn’t interfere to protect the existing industry leaders.

Countries that embraced trade-tested betterment after about 1800, Ms. McCloskey writes, were “startlingly more productive, creating ten times, thirty times, a hundred times more goods and services, and to the poorest among us.”

Some people want the government to protect jobs threatened by new technologies, but that’s an old mistake. “The advent of cars did not produce mass unemployment because of insufficient demand for the output of blacksmiths and horse traders,” Ms. McCloskey writes. “Fundamentally, all tools—a blast furnace and a spinning jenny, or for that matter an Acheulean hand ax or a Mycenaean chariot wheel—are ‘robots,’ that is, contrivances that make labor more productive.”

Trade-tested betterment worked not only for cars, but for all the appliances in my house. They are more reliable and sophisticated than those I had 40 years ago, and they use far less energy. The computer this article was written on, a Chromebook, cost me $175 a year ago. My first computer, bought three decades earlier, was more expensive yet did nowhere near as much.

When the government tries to protect jobs, it impedes economic growth and lowers the standard of living for everyone. U.S. policy makers should listen to Ylva Johansson, the Swedish minister for employment and integration, who says: “The jobs disappear, and then we train people for new jobs. We won’t protect jobs. But we will protect workers.”

Mr. Miller is author of “Walking New York: Reflections of American Writers from Walt Whitman to Teju Cole. ”

Who can we believe? Certainly not those who quote government-manufactured statistics to make a political point. The New York Times wants us to believe that real median incomes in 2016 are lower than those in 1973. What’s real?

The effect of entrepreneurial capitalism is to make everyone’s standard of living and quality of life better. Entrepreneurs rival each other in offering consumers the goods and services of betterment. The consumer judges, by buying or not buying, using or not using. The feedback helps the entrepreneurs to continuously improve their offerings. Life gets better every year. But the New York Times and the government don’t want you thinking that way. Hence the Bureau Of Labour Statistics (to name just one useless bureaucracy, totally dedicated to producing nothing of value) invents a methodology to refute the empirically observable facts.

Andy Kessler exposes the fraud.

____________________________________________________________________

As election season approaches, chants about the hollowed-out middle class predictably grow louder. Wages have been flat for decades, we’re told. “In 1973, the inflation-adjusted median income of men working full time was $54,030. In 2016, it was $51,640,” the New York Times breathlessly reported last year. Sounds awful. Except it’s nonsense. Cast a leery eye on anyone who uses 1973 as a base—it was a high-water mark before a deep recession. But the real red flag—what makes this argument totally bogus—is the phrase “inflation-adjusted.”

Enter The Bureau Of Labor Statistics.

The odoriferous offender is the manufacturer of inflation data, the Bureau of Labor Statistics. After the creation of Social Security in 1935, Congress would occasionally bestow vote-winning gifts on retirees in the form of benefit increases. In 1975 Congress switched to automatic cost-of-living adjustments based on a consumer-price index, or changes for “a market basket of consumer goods and services.” That’s food, rent, electricity, T-Mobile, Netflix .

Forget for a moment that some of that didn’t exist in 1975. As consumer items got more feature-rich and complex, the BLS simply couldn’t note the absolute price of, say, a microwave oven. So the bureau came up with the indulgently named hedonic quality adjustment, defined as “decomposing an item into its constituent characteristics, obtaining estimates of the value of the utility derived from each characteristic, and using those value estimates to adjust prices when the quality of a good changes.”

Let’s Do Our Own Hedonic Adjustment.

It’s a better measurement but still inaccurate. Here’s a thought experiment: Think about your car’s automatic emergency braking, sometimes known as precrash or collision avoidance. It has been an increasingly popular option in recent years. By 2022, it will be standard on most cars. Some silicon sensors and a few pieces of code—today it costs maybe $50 to produce. But what’s it worth?

Let’s do a little hedonic decomposing of our own. Before these sensors, you would have had to hire a person to ride shotgun and constantly watch for potential collisions and slam on the brakes for you. In 2016 the AAA Foundation for Traffic Safety estimated the average driver spends almost 300 hours a year in the car, logging more than 10,000 miles. Paying someone even $10 an hour to stare into traffic means that over five years, collision avoidance is worth nearly $15,000. Double if you want someone to look out the back window, too.

Does this show up anywhere in the consumer-price index? Of course not. One of the most lifesaving features has dropped in cost by three orders of magnitude in less than a decade. To the BLS, it’s practically nonexistent.

Then there’s that hunk of glass and plastic in your pocket. Your smartphone is your newspaper deliveryman, librarian, stenographer, secretary, personal shopper, DJ, newscaster, broker, weatherman, fortuneteller—shall I go on? The mythical man of 1973 certainly couldn’t afford $100,000 or more for dozens of workers at his beckoning.

By the time the BLS puts something new in the CPI basket, it’s already cheap, so it misses the massive human-replacement price decline. The CPI is good at freezing a lifestyle and standard of living and showing how it gets more expensive over time. Great. But the CPI absolutely doesn’t take today’s technology-infused lifestyle and work backward to show how much more expensive it would have been in 1973. Yet that’s what pundits infer when they talk about a hollowed-out middle class. How would the BLS reverse-decompose artificial intelligence and Alexa? Good luck with that.

The Currency Debasement Index.

The CPI is obsolete. The feds should more accurately rename it the CDI, for Currency Debasement Index. Most hedge-fund managers I know rely on the CRB Commodity Index, which tracks everything from oil and hogs to molybdenum and orange juice, as a proxy for inflation. The Bureau of Economic Analysis and the Fed also use hedonic adjustments for inflation, meaning that official measurements of gross domestic product and productivity are also massively understated.

Worse, that undermeasured hedonic cost decline driven by technology has allowed price increases to sneak in elsewhere without triggering classic inflation fears. Have you bought tickets to a professional basketball game lately? Studied your hospital bill? Rented an apartment? Bought smelly cheese, organic balsamic vinegar or a textbook?

Don’t Believe The Government’s Numbers.

Don’t believe the numbers—at least not the government’s numbers. Former Fed Chairman Alan Greenspan was on to this in 1996, saying the optimal level of inflation was “zero, if inflation is properly measured.” Freezing today’s lifestyle and going backward, I estimate a “true” median income of $347 in 1973 against the $51,640 of 2016. Today’s middle class isn’t hollowed-out. It’s living high on the hog.

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